In the dark heart of Europe lies a nation rotten to the core. Renowned as a secret banking haven where North Korean leader Kim Jong Il allegedly squirreled away billions of dollars, its economy is tied to the whims of capricious global money markets. The country's per capita external debt is 84 times that of the debt-ridden United States (some $3.76 million – €.31 million for each man, woman, and child).

Democracy is a joke, undermined by a hereditary and unelected head of state who not only can dissolve parliament, but appoints some of its members in the first place. Beleaguered citizens worry about just how sustainable their ever-more-fragile country is, which is no surprise given that foreigners make up 44 per cent of the population and the equivalent of another 25 per cent invade the country daily just to do its work.

So where is this armpit of the European Union, this cancer of the continent? Greece? The Balkans? Not exactly. Behold the Grand Duchy of Luxembourg, population 503,000, a tiny freckle on the map between Belgium, France, and Germany.

Sure, cyclists and hikers might see this bucolic country as a verdant paradise, with its rolling green hills and lush pastures. And bankers may marvel at its spectacular wealth: Luxembourg boasts the world's highest per capita GDP, $108,832 in 2010. But something must be wrong. The miserable Luxembourgers – who rate lower than all but one other European country on the Happy Planet Index (they're tied with war-torn Sudan!) – buy more cigarettes and alcohol and have a higher per capita carbon footprint than any other country. And yet their national motto is "We want to remain what we are."

I had to know: Could this hard-partying little duchy hold the secret to the dark forces now tearing apart Europe?

Read the rest of the article in Foreign Policy...